FNMA 30-YR 4.5%
Previous close 101.344
Opened down 0.19p @ 101.156
Economic Data:
EUR / USD 1.3737 Up 0.0088
USD / JPY 89.746 Up 0.2130
GBP / USD 1.5616 Up 0.0031
OIL 72.76 Up 0.87
Gold 1,075.40 Up 9.20
Key Economic News:
In a light day we get the latest readings on small business sentiment, wholesale inventories, and the ABC confidence index.
7:30: NFIB small business optimism index for Jan…Last 88.0. This index has gone essentially sideways since May while the ISM index has soared from 43 to 55 (as of December). Poor sales, concern about government requirements, and credit conditions are the items rising in relative importance as the chief concerns. The number of companies planning to increase employment was still slightly negative in December.
10:00: Wholesale inventories for Dec…another modest increase? These inventories rose more than 2% in October and November. Analysts look for another increas, but Commerce actually assumed about a 3/4% drop in preliminary GDP estimate for Q4.
Median forecast (of 31): +0.5%, ranging from -0.8% to +1.0%; last +1.5%.
17:00: ABC consumer comfort index…will it ever increase? This index has now been stuck in the -48 to -49 area for the past three weeks – roughly the midpoint of the range it has occupied for most of the past two years.
Advice:
Slight uptick, but still quite cautious
Small business register slight improvement in sentiment in January, though index lags well behind surge in ISM mfg composite. Expectations of credit less negative, and expectations of sales up for first time since early 2008; however, hiring plans remain slightly underwater and expectations for economy slip.
Key Numbers:
NFIB small business optimism index to 89.3 in Jan from 88.0 in Dec.
With foreign currencies improving against the dollar, and NFIB coming in a little better than last month, I can see the market selling off today.
I would lock today.
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